That error message is returned when move_uploaded_file from line 37 in the PHP script fails. Did you create a subfolder named (exactly) uploads next to your .php file, and did you give it the right permissions (eg. chown -R www-data uploads/ and chmod -R 755 uploads/)?
EDIT: actually you already said the chmods are 750, so maybe just make sure the owner of uploads is properly set (I presume it should be www-data, since you’re running gcloud). If this still doesn’t work, make sure you either have no open_basedir restriction at all, or otherwise that open_basedir gives your PHP script permission to write in the uploads folder
Jeremy